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New ‘Green’ EPA/DOT Scheme Under Fire September 16, 2010

Posted by seeineye in : Politics , trackback

by Barry Carr

Recently, the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) announced the latest Obama administration “green” initiative: Assign cars an A-D letter grade, to be noted on labels affixed to car windows at auto dealerships, based exclusively on the car’s purported environmental-friendliness.

The executive branch reportedly got the idea from Britain, where the labels have already been introduced in order to push drivers to purchase more “energy efficient” cars.

But here, unlike there, the idea is already meeting with stiff resistance from pretty much everyone– free market advocates, automakers, car dealers, consumers, and even some green types– on a variety of grounds that could imperil the ultimate implementation of the scheme.

The free marketeers object to the scheme on the basis that it represents a “nanny-state” approach in which government seeks to interfere with the natural operation of the market for cars.

The Alliance of Automobile Manufacturers takes a different view, and following its announcement bashed the proposal, suggesting it was overly simplistic and reminiscent of “school-yard” style grading, while pointing out that “grades may inadvertently suggest a government label of approval.”

Meanwhile, car dealers say they like the idea of a simpler label for new cars, but think this proposal misses the mark.  According to Steve Cook, a dealer from Michigan quoted by the Wall Street Journal, “If a big SUV is going to be downgraded compared to a small car, that’s not going to be effective because [the person] who is buying a truck already knows it uses more gas.”  A better system, according to Mr. Cook, would rely on comparisons between vehicles in the same size class and assess their efficiency and environmental impact relative to each other.

A recent poll by Edmunds.com also indicates that consumers dislike the proposal: A mere 18 percent of those surveyed favored the letter grade proposal.  82 percent preferred a label that simply offers more detail with regard to fuel economy and fuel costs than the current version.

Fans of green technology have not had a universally positive response to the plan, either, with some saying the proposal actually enables government to pick winners and losers among green car manufacturers (let alone the whole industry), and entails the administration according a preference to certain technologies over others.  It has been reported that the only cars eligible for an A-plus, A, or A-minus grade would be electrics, plug-ins, and hybrids.  One opponent of the scheme with whom Capitol Confidential spoke said that means that some green cars, especially those relying on clean diesel technology, will lose out unfairly.

“It’s pretty ridiculous to have a system in which VW and Audi TDI models, which won Green Car of the Year awards recently, are graded to suggest they are somehow ‘not green.’” emailed our source.

One writer at Grist, an online environmental magazine, meanwhile criticized the plan this week on the basis that the proposed label would provide too little information to enable consumers minded to make decisions based on the relative “green-ness of cars” to consider all relevant data.

Despite this tidal wave of opposition, the EPA and DOT reportedly remain keen on continuing to pursue the new labels, as part of ongoing efforts to drive consumers to purchase more green technology, like the Chevy Volt, made by government-owned General Motors.  Recently introduced to the market, the Volt costs about $40,000– a price that some auto industry observers say makes it unappealing to run-of-the-mill consumers.  But a high A-rating could potentially make the Volt more marketable to potential buyers concerned about value for money, especially in view of the car’s relatively short range, they say.

Of course, as a USA Today editorial on this subject notes, “People’s priorities vary,” and not everyone prioritizes “green-ness” when buying a vehicle.  Setting aside the questions of whether this proposal skews the market and whether it even appropriately denotes which models of car are “environmentally friendly,” EPA and DOT have yet to explain how this scheme helps the soccer mom with three kids and a dog figure out which minivan– all varieties of which will be given a mediocre grade– to purchase.

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